Another Multi-Billion Dollar Fund Interested In Bitcoin
Bitcoin captured the attention of those on Wall Street. There is little debate left there. The list of companies entering just keeps growing.
While the likes of Microstrategy are known for their direct buying of BTC, others have to take a more indirect route. SEC regulations prevents many firms from entering into Bitcoin directly. This is where Grayscale gained in popularity.
Since the trust is traded like any other stock on the exchanges, anyone can purchases shares in it. Grayscale investors are the ones who actually buy the Bitcoin, giving them an opportunity to cash out for a profit depending on what the premium is.
The latest entrant, according to a SEC filing, is Miller Opportunity Trust. Established by legendary investor Bill Miller, the trust has over $2 billion in assets under management.
"The Fund may seek investment exposure to bitcoin indirectly by investing in the Grayscale Bitcoin Trust, an entity that holds bitcoin. Grayscale Bitcoin Trust is a privately offered investment vehicle, the shares of which are also available over-the-counter. Bitcoin is a digital commodity that is not issued by a government, bank, or central organization. Bitcoin exists on an online, peer-to-peer computer network that hosts a public transaction ledger where bitcoin transfers are recorded (the “Blockchain”). Bitcoin has no physical existence beyond the record of transactions on the Blockchain. The Grayscale Bitcoin Trust invests principally in bitcoin. The Fund will not make any additional investments in the Grayscale Bitcoin Trust if, as a result of the investment, its aggregate investment in bitcoin exposure would be more than 15% of its assets at the time of investment."
Notice that last line:
The Fund will not make any additional investments in the Grayscale Bitcoin Trust if, as a result of the investment, its aggregate investment in bitcoin exposure would be more than 15% of its assets at the time of investment."
For a fund that is $2.25 billion, that is more than $300 million before they stop buying shares in Grayscale.
Obviously, this is a bit different than investing in Bitcoin directly yet it does put more buying pressure on shares of GBTC. Since that helps to drive the need for more Bitcoin, it will end up putting more demand out there for the coin itself.
Miller Opportunity Trust is not the biggest fund out there. To give you an idea, at the end of last quarter, Tesla, not known for making a ton of money, had more than $20 billion cash on hand. This is 20x the asset under management of Miller.
That said, $300 million eventually being pumped into Bitcoin is no small amount either. While not direct, the move could help to push things forward even more. As always, this is just another validation for Bitcoin as an investment, something that could push more Wall Street firms to enter the mix.
Things are really moving fast. Here is a headline from the Microstrategy Conference:
This is what the founder also had to say:
Stevens claimed NYDIG has seen zero clients walk back their initial investment to date.
"My partners bought more bitcoin in 2020 than in 2013-2019 combined. As our fiat businesses continue to inflate and accelerate, I expect we will buy more bitcoin in the next two years," he said. "We are capital allocators. If we didn't believe we would make money off this, we wouldn't invest a penny."
There are two ways for his firm to get to that number from the present $6 billion it is holding. The first is to buy a lot more Bitcoin which is likely to happen. The second is for the Bitcoin under management to be worth a lot more than it is now. This is likely to occur.
With all these firms entering the market, there is little doubt where Bitcoin is going this year. There is a low probability that Bitcoin will end anywhere near where it is now. The price will likely be much higher.
Each new entrant means hundreds of millions of dollars flowing into Bitcoin. This will only keep growing as the larger firms start to take notice.
If you found this article informative, please give an upvote and rehive.
gif by 
logo by 